In front of a crowd of city employees and press, San Francisco Mayor, Gavin Newsom addresses his new budget plan in the San Francisco Police Department Tactical Operations center located in Hunters Point Shipyard on Monday, June 1, 2008, in San Francisco,Calif.

San Francisco Mayor Gavin Newsom proposed a multibillion-dollar budget today that erases a projected deficit of about $330 million by laying off 450 workers, limiting overtime costs and raising some city fees.

Newsom said he would eliminate more than 1,000 city jobs in a variety of departments, but some of those jobs are vacant. He also called for major cuts in overtime paid to city workers.

The mayor also wants to spend more in some areas in fiscal 2008-09. He said that for the first time ever, the city would meet its mandated goal of having 1,971 police officers on the streets, possibly as early as September.

He also proposed spending about $37 million on Healthy San Francisco, the program to bring health care to all uninsured city residents.

The city's projected deficit has been blamed on several factors. They include cuts in state and federal funding; labor contracts for workers such as police and nurses that will cost the city an extra $118 million next year; and a reduction in the amount of money being carried over from this fiscal year.

Despite the gloom surrounding the city's fiscal situation, Newsom sought to give an upbeat message this morning in unveiling his budget proposals at the former Hunters Point Naval Shipyard.

He boasted of a thriving downtown where office space has been built and sold at a rapid rate over the last three years, bringing in millions of dollars in property-transfer taxes. The mayor also bragged about increases in tourism and the fact that dozens of businesses have decided to establish their headquarters here in recent months.

Newsom also defended the city's labor costs. The city's police officers, he argued, still make less than they would in other cities such as crime-plagued Oakland, where authorities are also struggling to attract new officers. Yet he also seemed to criticize some labor unions for not negotiating pay cuts or other money-saving measures.

Newsom bristled at accusations that the city's government is growing at an unreasonable rate. He said while the state and federal governments have grown by 6 percent and 7.3 percent, respectively, the city's budget has only been growing by 5.2 percent.

Over the next month, the Board of Supervisors will hold hearings focusing on the budgets of individual city departments. A final budget is due by July 1.